Comprehensive car insurance offers peace of mind to vehicle owners. Also known as full or complete cover, it means you can be covered for a range of circumstances, including:

• Repair or payment of the insured value of your vehicle for events including theft, collision, fire, malicious damage and weather-related damage
• Repair or payment of the value of other vehicles that are damaged by your vehicle in an accident, and damage to property up to the policy limits

Some companies offer a variety of optional extras as well, ranging from windscreen protection, to use of hire cars. That said, it’s important to always read the Product Disclosure Statement (PDS) of your policy to get a better understanding of policy inclusions, limitations and exclusions.

Third party insurance is the minimum car insurance product which most car insurers offer. There are three types available, which are:

• Compulsory third party (CTP): Covers death and injury to people if you’re involved in an accident. Each state and territory has different rules regarding this cover, so it’s important you check with your local transport authority for further information
• Third party property: Covers repair costs for property damage caused by your car up to the limits of the policy
• Third party property, fire, and theft: Covers damage to other people’s property and provides cover for theft of your vehicle, or damage to your vehicle caused by fire up to the limits of the policy

Ensure you review the Product Disclosure Statement for policy inclusions, limitations and exclusions.

The amount you pay for car insurance ultimately depends upon how risky the insurance company thinks you are to insure. A number of factors can contribute to this, including your location, your driving history, and your age. According to the Transport Accident Commission (TAC), young drivers in Victoria are almost four times more likely to be in a car accident, which results in a serious injury or crash, than more experienced drivers. Factors like this may increase the car insurance premium for young drivers.

When you sign up for car insurance, you’re often asked whether you want to insure your car for an agreed value or for market value. This is the monetary figure you’ll receive from your insurer should your car be written-off. Market value takes into consideration depreciation and wear and tear, making it an accurate representation of the amount you would have received if you’d sold your car. Agreed value is an amount you and the insurer have agreed upon at the start of your policy for the period of insurance. In most cases, the figure may still reduce to account for depreciation at time of renewal. Ensure you review the Product Disclosure Statement for policy inclusions, limitations and exclusions.

While insurers calculate premiums differently, there are a number of things you can do which may reduce the cost of your car insurance premiums. These include but are not limited to:

• Parking your car in secure parking (such as in lock-up garage) if possible, to reduce the risk of theft, vandalism, flood or storm damage claims
• Buying a car fitted with an immobiliser or a security alarm, or having them installed. This may reduce the risk of theft and damage claims
• Driving less often. For example, catching public transport to work. Some insurers may offer lower premiums for drivers who don’t use their car frequently
• Limiting the number of drivers nominated on your policy, especially if they’re under 25. Fewer drivers means less risk of a claim for your insurer
• Choosing a higher excess, which means you’re taking on a larger part of the risk from your insurer
• Choosing to insure for market value or a lower agreed value, which will reduce the amount your insurer has to pay-out should your car be written-off

If you’ve been insured by your provider for an extended period of time and haven’t made any claims during that period, you may be eligible for a no-claims discount. This discount is usually applied to your premium, partly as a reward for not making a claim and partly out of loyalty for you staying with your provider. Eligibility for the discount can vary depending on your insurance provider and their criteria. When reviewing policies and providers, it might be worth finding out about their no-claims discount and discovering the length of time that has to pass in order for you to be eligible. In some cases, insurance providers may carry over your no-claims discount from another provider. In some cases, a provider may not offer a no-claims discount, and will instead offer a reduced premium based on other risk related information. Ensure you review the Product Disclosure Statement for policy inclusions, limitations and exclusions.

Whether your car insurance covers unlisted drivers ultimately depends upon your individual policy. It’s important you check with you provider to determine how an unlisted driver is taken into account for your policy. In some cases, it may increase the cost of your excess should they be driving when an accident occurs. In other cases, it could result in the refusal of a claim. Ensure you review your insurer’s Product Disclosure Statement for information about policy coverage, limitations and exclusions.

Just like some other forms of insurance, such as travel or home and contents insurance, car insurance can have an excess payment. It’s the charge you pay after making a claim in order to receive the benefits that your policy entitles you to (such as repair or replacement of your vehicle). You usually only pay an excess charge if you’re at fault or are unable to identify another party at fault. By paying an excess, you’re taking on a small part of the financial risk (which helps to reduce your premiums). If you’re able to identify a third party who is at fault, your insurance provider will then go to the third party to recover the costs – or their insurance provider. Ensure you review the Product Disclosure Statement for policy inclusions, limitations and exclusions.

How you make a claim depends upon your insurance provider and the options they’ve made available to you. Some providers allow you to start the claims process online or via their app, while others require you to contact them over the phone. Important details that your provider may request (if feasible) when making a claim can include but may not be limited to:

• The details of any other party or parties involved, including name, phone number, vehicle registration, address, license number and insurance details
• The names and phone numbers of any witnesses
• Photos of the accident scene and damage to the vehicles involved, if possible
• Any reports from police or paramedics, if they were required

The best car insurance ultimately depends upon your individual circumstances, needs, budget, lifestyle, and the type of car you drive. To help decide the level of cover you need, the Australian Securities and Investments Commission (ASIC) suggests considering the following  questions:

• If I crash into a luxury sports car could I afford their repairs?
• Is my car likely to be broken into?
• How will I get around if my car is stolen or written off?